OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN

HonorableClaude ii. ~illiema Chairman an4 %soutire ~lreotor Teuo Unmploymont Gonpmmation Oola~isdon matin, Texae

thir opinion,has bea appellateaourts (38 8 Mtlolo bmtlb 17(r)(4

**r0ii0w8** t equantlyrtatea 3.21 etaon or the **truotion** or

read8 In part a8

ned ie the questionof whether the 'owned or oontrolla4 (by leelly enfomoabls meant or othemiro) dlroCalyor ia&ireotly by the same intere88.' "Query: Dsea Bubso&ien 19 (f)(r)ra4.r l a& employingunit li.ablo ai an employerunder them tPOt#l Ul. A owns anQ operatesan individual business. ?ie likewise 

### owns iOQ$ or the voting steer 

### or a 

### eerporatlon.Bon. Olaude k. Wlllar, pa60 I



### *e. A 011110

end operateean iz~Ilvi4~1 buOlneee. b likewIreown6 51s si the voting ebook of a cormpation."3. A andb are equal prtnare In a buainsse. A and B likmlee own IO* Of the total rating etook o? a mrporatlon, A owning 8g and n owaing SO$. *a. A, B and 0 are equal pru'tnere in a bo~lnore. A ON B raoh own8 one-third of th0 voting Btook af a corporalha.
A B and C eaoh omr one-tklrdof the votiag 022k oi a c0qwnliloa. Baoh llkOds0 ornO onethird oith TOCIA@

Ob oaf bf l a&her eorpratlon.~ ArtFolo 538lb 1'1(f)(4),eupra, doiinee~aaraployor a0 tol&we:

"(4) &y re@oyln& wilC whloh togrthr with one or mare other mploy$&%@units, Se owned or oontmlle4 (by le$eUy l

nfomubl,;li,

mdene or oth~ruiee)direahly or indtniotlyby the earn intanet, or which owae or eontrol8one OS moreobh~~qlo~inb; uoik (by le@llr onfero~able moo&e

### or WkorwfW), urb whisk, if tnrto& ae a 01nglo UAIO with Owh Qabd O~lplo~ln($,u~iO, wouU be an auployar ux&il*r paregraph {l) of this subeeeDion;*
In your flret hat rituatlorr, A OWIW a& eperatoe an indlrl4u0lbwineee and aleo hmr l&0$ of t@ rotlag nt00k of a oerpoxatlon. Wo aeeume that A ,OWAO011 of th 8Dsek of the eorporatlon and thr8 tha p&Fame "voting atook" has LIB obhar meming,

3trlotly apea'klaa;, it may bs aaid that the etaokhoZPen are not the 6wnore of tha oorpore?+e pxopeS%~. $&3y do part&- oipak to the dletributionot the WIPplue

### prorate iUw3 anmet*. Pmeml#J

ouoa dl~.tPlbut~on, their rigate are eaid to be mraly ,;yitial. 10 Lax. ;rw-, pp.,9803818and auth0riblee 

### tbmelo

. IC is eloo aaid that a partnet doe0 not own any patiloular interest in 0 perlmership Ontsrprtes but bfe intelvet mtande only to a praposti,on8*o *hard of what rar remain after&an. Blatabe **A.** William, pegs 8

pay&At o? the debts of the putnorehlp em4 8ho SJdtlWOAt of its aooouate. **Sherk v.**  **Bank, SO6**  **6. Vi.**  **WT.**

The ~oau of Tua8 ~AOEBp~o~~Athnpmeatlon (bmi.eeioA, et al la. &as, 151 J. ki.(ad) SW (Sup, Ct. of Texas) involved three pwtnerehipe. **A,** B end 0 eomporsb cno **partnerehip, A,B**  C and D oomposeden&her and partnuehip. A, 8, C an6 E eompoeeQthe third

IA holbllrq

that thou thou p8rtneTehipe were 

### not owned **by** the leme Interdot within tti aeening o? Artlole UEBlb 19 (f)(4), **mupIa,** kantice Grits ea54;

*It la erldont~that theao thrsa oen*drneare n& **owned by**  **the same**  ***lntereBt.*** This 18 baoauee there lo a partnar in No. 0 who has no lntueet iziNc. 1 or No. $1 anil

theso lo a paHn4r In Ho. S who he8 no Interest in 3Jo.

1.or No. 2. I8 follows that,;? thus 6oaoeMe oonrtltut~ OBI *Ilrqplartr,@ tt met be be6auee thy (m un&er the ~oo~tL”ol~ of the *earn intorut 0tatute .

4* wlthlo flu meenlqj ef the above quet&

This lamgaage lndlretu to us that partners eaa own a **buBlAtO0 within**  **the menlAg**  **of** &t5010 liEB1b **17(r)(r)** gugra. This being true, itwt3uid ?ellov ttlet tha **OWAUO** o? rir tm #took of LI

rorpooatlon own the OerxWatlon withli the aeening of th8 same statute.

In anowor to pur uueettonbased 

### upon the 

### fimi fast altuetion,

we ere;o? the opltien that the iadlvldaalbuMno end the oorporatlon are ewe& by ths eamo interestrith5n the aemnf~y of Artiole E&&lb 19(i)(4),supra. St ?oll@we that eaah emplop5ngunit lr **aA** amp~oyef aa drflne6 **by** the Unemplofmerit **Aot.** In your awmd fast eittr*tlon, **A** owns and ojwrat~een individualbualneseand also own* Sl$ of the Yatirig **stock** a? a oorporatlon.

iye wish to **point out**  **bar*** **thet** thraughout **this opinioa**  we hare assumed that the oorparetloae mentioned bat** ~eeoeil only one tpgo oi eteok and that tb0 phrase wvotlng etoe+kw bar **A0 Other**  BKWi~.Hon. Olaude A. Willinns, page 5

situationbased upon Q&mll;ar staDuts8as i.nvo2v4bare. It3 that eaw, one tie A. fiica iadlv~dually

omrnd an& gperatada telephonaryatem saployingsir IfPLlvidu(Lla. Eisliketise ownsd 449 of the bob outmtandlagshares of steak In a corporatlon owningand operatinga telephonesgrkplwhich 

### l mgle)rrd sovan indiriduale, Bssides annisg 440 ahsres oi stock in ths oorpcraOlon,cm&e being SO,&# ot all the stoat,Mea was alac Proridmnt, dirsotorand generalmasa&rr of ths corporatloa. The wire and father or Bioo **owned** the,othef51 sham8 

### or steak In the oorporation.

In holdingthat the above emu&oratedtaots bid aot ooqwl the oonolusionthat Bias aoatxolledthe aorpora~lon by legally anfcrsaabls mans or othsmmise,the &proms Court ot Yiesoux+ saidI

“DO the ooaaadsdFasts in this sare soqpel ths eon

### elusion or fast that respondeatserpo~atlon wad *mantrolled*by Dse A. Bioet AppQltaatrr&J on t5Q usas ot the atatutsr *ConWoUUed by lagally eniorseable mean8 or otha#uisQ, dlnstl~ w i&IireetLJ, b; the oama intorwts.* JIlthougb tha awideneo may have beea ruah that an 

### 5aremumr of raot aouLd have basn drawn to tha orfeet that ‘respondent oorporatlon was OQQtrolled by Gee A. ,%ae the iairreaeswas not (Lram fmm the evidence by the trial o6urt, and ths Qvl(leneQ, as eonsedodstidentiary fasts,was not woh as to w th. **O@EdiUiOtl Oi**  iaot that res emdMbwa8 a0 sontm 1‘ r a&. Then was no eridenee that he Pie* vor;a& hi0 440 aharas 

### or rtock in rr8pondsnteer ratton or that hs aentmlled the eor~poration*s War r ot dfTeettc8. *ho mara faat that he was rniplo~ed as manager of the aQPp.Wation, and was its prasldeatsnd was one 0r Its three direotors,dose aot coaps~ tha aonohrlon that he matrolLad ruponbent by legally Qziiorasebls maan of othetwise, direotlf or imlirwtly, or that he QzOSC?i8Ql ths power to control that was hia by reason ai his otneX8hip of a majortt~or respon&erd*r rt~ek, and 8Wh fa8t Us not oonaeded by the respendeA6.: Proor tha6 bhr of tha two 'a~Qloyft& **~1~8 ’**  **Wat$ u~+LLCilPatch]l**  **Ted** the 'muse ~LiCeTeS68,' ?&A& hha6 b&h @otid~bOo~~~~ll~d, did not coqml the oonolw~n tha6 bsth sai~ls~inl, ~~%tQ **were controlled**  **by the**  **‘ “**  **ae** iat8nstQ.' "l'ha holdsn c# a wsjox5ty ,@i the stock Of Q OQE- ~CIX.E~IO~

ST* ,Qroourso, QntftlQd to dieaclte its polisr and sonduot it8 busiar88 In thslr OWB 

### WW QB &Q&S a8 OhWHon. Claude A. ullllau, paga 6

not in good rafth and thalr **nets** 'areintrafiras, but a mere 8dsl8eSoa that the 0wni2vshlp 0r a majorityor re8pOXldsnt's Gtook wad in &a A. Rioe ~186 not 6n adz;;ion that euoh individual 'oontrollsd* tha corporak1thouCha oorporation may conduot buainaar throigh its pFe8idantand other ofrioere tha ultimate **sour:06** of all authority lies in t&s board ot dirsctors Who Stand iKI

ths pia Or the individualstookholderr in tha Qen8e of oontrol thqoxeroity over oorporata **affaIr8.** ha adtEiQ8iOn that u.8 A. hi00 **11168** PrWBidOnt and manager of the oorporation -8 not an admi8Qion that he oontrulledthe aorporation.'
In ths **h88 0880,**  **8up~-a,** .hItioe **hits** quotes **f~ra** the Doniphab U.ephona Cospany onea, Qupxa,a8 rOuOW#t

"'+ * * Pl'oOl'

that ths OOnt%d OS th8 tvm "smplaying units*was ultisabaly rested in tha %amQ ihtQ1YQt8,"and that both am&l be oatroiled, did not ooapal the oonolu~ionbha8 both enployia~unit8 were 00m0u3a by theYasia illtaralt8".*" On the **basis or**  **t&e** abare aitad OQ%Q8,wo oonsludethat the ownerstip 0r al% or tha Qtaok 0r a aorperation by an individ~aldoes not of itself JlQOQ8QQril~ eo@psl the Qona1usion that rush iaaivldual contxolsaaid earporation within the maning or &tlcle 866lb 17(f)(4). 

### PUS, inl ftwt, an8wws pour qW#tiOfl ba8ed Upon the QeOOBd faclt Qit@atiO$&.
In pfiur

third raat Qltuahibn,A and B are 

### l pual partnerr in a **buelnese** aad **liksd80** owa,lOC$ of the atoak Of a eorpuratlon,

k owningbC$ and B crrning W$. 38 are or the opinion that tha **partnsrrbip** and the aorporatlon are ownad by ;$ 8ame intereatwithin the mesain& of ArticZoWDlb 17 (i) mpra, for the Qama rmQonQ as cwtained ih the amwer ta $Our questionbased upon the first iaot situation.

Xn your fourth fast situation,A, B and 0 are aqua1 partners in a buelneas,and A and B qrs east **the ownsrs**  **of OR+**  third or the **atook** or a oorpcraticn. For the raa8oaQ point04 out in the answer to pour **quesaion** based **upon** the ascend Paot situation,

we aoncluds that th,a ownershipof one-thirdof the rtoak by eaoh, A and B, d-8 hat of itselfnQoss8eri1yoonpol the coaolurionthat they cwu or aontaol the Qorporation within ths m8asiag or ArMale 5aelb 17 (r)(r), supra, This answers **your question**  based upostha rourth raet situation.Ban. Qlada A. Williams,puim b

Xn your fifth iaat sl8uafiion, A, B and C oaoh owna oaa-thirdof the stook in two dlrfrrmt oarporatlona. kt aro or tha opinion that both ~orpomtfonr are owned by tho aam iAtOF.Et within thE rceanlng 0r Article SZ2lb 17 (r)(4), aupsa, ror the masons aatsd in the anner to the question in your first ract situation.

FIRST ASSISTANT ATTORNEYGEU~L Youra 7ery ttruly bTTORlQ3YOZXERAL

OF T3W.S